Checks typically provide a safe and convenient method for an individual to purchase goods and/or services. To use a check, the individual usually must open a checking account, or other similar account, at a financial institution and deposit funds, which are then available for later withdrawal. To pay for goods and/or services with a check, the payor (i.e., the account owner) usually designates a payee (i.e., the merchant or seller) and an amount payable on the check. In addition, the payor often signs the check. Once the check has been signed, it is usually deemed negotiable, meaning the check may be validly transferred to the payee upon delivery. By signing and transferring the check to the payee, the payor authorizes funds to be withdrawn from the payor's account on behalf of the payee in return for the goods and/or services provided by the payee.
Checks have certain advantages over other forms of payment, such as cash. For example, while often considered the most liquid type of asset, cash may also be the least secure. Unlike a check, cash is usually freely transferable and does not have to be endorsed. Thus, the owner and possessor of cash is most often the same individual. Because cash is freely transferable, cash that is lost or stolen typically cannot be recovered. Therefore, the risks associated with cash transactions are often unacceptable, particularly with respect to transactions not conducted in person (e.g., by mail) and/or involving large sums of money. A check, on the other hand, provides a payor with more security because the check usually requires a payor to specify both the person and amount to be paid. Furthermore, as noted above, the check is usually not valid until it is properly signed by the payor. These safeguards help to reduce the risk that money will be lost and/or stolen and ensure that the proper payee receives the proper amount of money.
Cash may have other disadvantageous as well. For example, because cash is freely transferable, there may be little or no verifiable transaction history. It is often desirable for a payor and/or payee to have physical proof that a particular transaction took place. This typically requires that the payor receive a receipt. However, receipts may contain errors and can be easily misplaced. In contrast, a bank processing a check will ordinarily create a transaction history, which may include the identity of the payee, the amount to be paid, the date of the payment, and the signature of the payor. This enables both a payor and payee to independently verify the accuracy of most transactions involving a payment by check.
While checks may provide an account owner a convenient and secure form of payment, obtaining new checks may also put certain burdens on the account owner, such as the time and effort required to monitor check usage. For example, an account owner usually obtains a finite quantity of checks at one time. Thus, the account owner is typically limited to writing a certain number of checks based on the quantity of unused checks on hand. As checks are written and cashed, fewer checks are available and the account owner may be required to reorder more when the supply of unused checks is insufficient. However, the account owner may not realize how many unused checks are available. This frequently occurs because unused checks are often stored out of sight, maybe in a desk drawer or in a file cabinet. Furthermore, an account may have multiple owners, each writing checks from the same account. Thus, each account owner may not know how many checks have been written and/or how many unused checks remain. If an insufficient number of unused checks are available, the account owner typically must manually reorder new checks and wait for them to arrive and/or resort to another form of payment. This can be problematic when paying bills, for example, because bills are often payable by mail and due on a specific date.
In addition to monitoring check usage, an account owner often must manually go through the process of reordering checks, which can be tedious and time consuming. Typically, the reordering process involves calling a customer service representative, mailing in a check reorder form and/or sending a request via a website. Therefore, there is a need for an automated check reorder process that provides new checks to an account owner when new checks are needed.